SB 17-157

Senate Bill 17-157 in Colorado requires that before a homeowners' association (HOA) can sue a developer or builder for construction defects on behalf of its members, the HOA must first notify all unit owners and get approval from a majority of them. This applies unless the HOA already has a contract with the developer/builder or if the lawsuit is expected to be worth less than $100,000. The bill also restricts developers and builders from directly contacting individual homeowners while the HOA seeks approval for the lawsuit. Since it's signed into law, this means that all relevant HOAs in Colorado must now follow these procedures when considering legal action against construction companies.

Official Summary

The bill requires that, before the executive board of a unit owners' association (HOA) in a common interest community brings suit against a developer or builder on behalf of unit owners, the board must: Notify all unit owners; and Except when the HOA contracted with the developer or builder for the work complained of or the amount in controversy is less than $100,000, obtain the approval of a majority of the unit owners after giving them detailed disclosures about the lawsuit and its potential costs and benefits. The bill also limits the amount and type of contact that a developer or builder that is potentially subject to a lawsuit may have with individual unit owners while the HOA is seeking their approval for the lawsuit. (Note: This summary applies to this bill as introduced.)

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